NEWS Accounting        29/08/2019

Turkey has been stunned with a flurry of price increases in August 2019

Turkey has been stunned by a string of price increases introduced in August 2019.

 

As a result of the financial currency crisis of August 2018 which caused prices to leap and the determination of the Turkish government to prevent price increases leading up to the municipal elections in March and June 2019, many price increases have been delayed. We can now expect the mounting backlog of price increases waiting in line to finally make their way into the economy. Despite the oncoming onslaught from these price increases, the government is still confident that it will continue to reduce inflation and meet its yearend target of 13.9%.

 

The Energy Market Regulatory Authority (EPDK) announced on July 31st, 2019, that the Turkish state energy company Botaş had as of August 1st raised natural gas prices by 14.97% for residential users, and by 13.73% for industrial users which consume more than 300,000 cubic meters of gas per year. This follows a price increase for electricity of 14.98% as from July 1st, as announced by EPDK on June 28th. Following the natural gas price increase as of August 1st, an electric price increase will be expected since electricity producing facilities use natural gas input. However, this has been delayed until after August.

 

A price rise of TL 1-3 on a packet of cigarettes was introduced by manufacturers on August 2nd which increased the packet of a TL 12 cigarette packet to TL 15. This has been followed by the Turkish government’s introduction of a further tax on cigarettes. According to Presidential decree no.1424 dated August 14th, as published in the Official Gazette  on August 15th, the minimum fixed lump sum tax rate on cigarettes has been increased from 0.2895 to 0.3899. The tax on cigarettes and tobacco powder remains at 67%, resulting in a final tax rate of 0.4539. This new tax increase has resulted in a price rise of TL 3 for a TL 15 packet of cigarettes, bringing it to TL 18. The previous tax increase was on May 2nd.

 

A 15% price increase for tea was announced by the General Directorate of Tea Enterprises (Çay-Kur) as of August 20th. This follows a 15% price increase for tea and a 16% price increase for sugar announced on June 25th.

 

Transportation price increases in Istanbul were announced on August 27th. The Istanbul Taxı Drivers Chamber announced a price increase of 25% for taxis in Istanbul. The opening metre price increased from TL 4 to TL 5, and the minimum payment was increased from TL 10 to TL 13. The Istanbul Service Operators Chamber announced a price increase of 13% for school service buses. The Istanbul Minibus Drivers Chamber announced a price increase of 20% for minibuses.

 

Petrol, diesel and LPG prices increased by between 1.5% and 3% on August 26th.

 

There are many other items for which there were price increases not mentioned above. For example, fee payable on departure from Turkey (TL 15 to TL 50), fee payable for bringing mobile telephone to Turkey (TL 150 to TL 1,500), red meat, chicken and most market items.



Turkey’s net minimum wage has been raised 26.05% to TL 2,020 (USD 381) as of 01.01.2019       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s annual inflation rate falls to 15.01% in August 2019       Turkey’s unemployment rate decreases to 12.8% in May 2019       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 82,003,882 as of 2018 yearend       Number of foreigners visiting Turkey in 2018 increases by 21.8% to 39.5 million       Turkey’s private sector foreign debt is USD 225.8 billion as of 2018 yearend       Turkey’s economy contracted by 2.6% in the first quarter of 2019       Turkey shows surplus of USD 538 million in its 12 month rolling current account balance in June 2019